Zhang Xia, an analyst at China Merchants Securities, said in an interview with the South China Morning Post (SCMP) that "US tariffs, coupled with the devaluation of the renminbi, will significantly increase the operating costs of many Chinese technology companies that rely on imported raw materials, such as semiconductors and integrated circuits. And electronic components."

The focus of the market has now shifted to places other than trade friction. The stock prices of many large Chinese technology companies have also fallen sharply for other reasons.

Just three years ago, the company has recently become the latest Chinese large-scale e-commerce company listed on NASDAQ in the United States, but the IPO (IPO) is not a panacea for the company. On the contrary, its listing has caused people to pay great attention to the “brand name” on its platform. Investors are also dissatisfied.

Since the peak in January,TencentThe stock price has fallen more than 25%, and the market value has evaporated by $143 billion in the past seven months. From the decline of each stock compared to its 52-week high, this is the biggest market value decline in global stock markets.

Search giant Baidu has not been spared. After Google’s rumors of re-entering the Chinese market, the stock price of Baidu fell nearly 8% this week.

Strengthen supervision

IPOs are usually gratifying, but from the point of view of last week's situation, IPO may also be detrimental to the company. The company that combines e-commerce and social media elements is aimed at low-income consumers who live outside of second- and second-tier cities. Recently, it has been accused of fueling the sale of counterfeit and shoddy goods.

A few days after the listing, the share price of the company has plummeted by 16% and fell below the issue price of $19. TV maker Skyworth asked the e-commerce company to remove the fake Skyworth brand TV products from its platform, which triggered a decline in the stock.

This week, the company announced that it has removed 10.7 million problem products. However, concerns about investors and regulators have not eased after the company launched an investigation into its platform products. Its share price fell 30% from the closing price of the first day of trading, and the market value evaporated more than $9 billion.

To make matters worse, seven US law firms have conducted an investigation on behalf of their investors. The statements issued by these law firms show that investors have suffered financial losses after Chinese regulators began investigating the company's platform. Recently, he has met with regulators and agreed to improve the review process for their products.

However, it is not only the e-commerce platform that is affected. BarragevideoThe stock has fallen nearly 21% since July 20. Its app was removed from the Chinese app store for a month. The B station, which is listed on the NASDAQ, responded that the company is undergoing in-depth self-reflection.

I am afraid that competition is coming.

Baidu found that even unconfirmed competition could lead to a sharp fall in stock prices. There is news this week that Google plans to launch an Android search application for the Chinese market. This move may mark Google's re-entry into the Chinese market.

Baidu currently accounts for nearly 70% of the Chinese online search market. In 2010, Google closed its search engine in mainland China and pulled out of this vast market. The number of Internet users in China has now exceeded 770 million, twice the total population of the United States, exceeding the total population of Europe.

Baidu’s revenue is still highly dependent on advertising revenue, and its advertising revenue increased by 25% in the second quarter. Google’s return is clearly seen as a threat, and Baidu’s share price has suffered a setback, falling from $247.18 on July 31 to $226.83 on August 2. This is the biggest decline since the company announced its departure from chief operating officer Lu Qi in May.

Steady down

Still, all of these losses seem insignificant compared to Tencent. The company's share price soared 114% in 2017 and hit a record high in January 2018. However, since then, its share price has fallen by nearly $130, and a significant portion of the market value has disappeared. In July alone, the stock fell by 9.9%. The company’s record-breaking market value has also surpassed Facebook’s $130 billion evaporation one day after the earnings call last month.

In April this year, Tencent’s market capitalization lost more than $20 billion after South African investment and media company Naspers announced that it would cut its Tencent share by 2%. In addition, the company's president Liu Chiping sold 1 million shares. Coupled with Naspers's reduction and margin warnings, Tencent's $51 billion market capitalization was lost.

“Investors are increasingly evaluating the price of the stock in accordance with Tencent's interim results expectations,” said Linus Yip, strategist at First Shanghai Securities in Hong Kong.

Linus Yip expects this downward trend to continue, not only for Tencent, but also for the entire industry. “Overall, other technology companies are facing similar problems. Their profits have been growing rapidly in the past few years, so as competition has intensified, some areas have become saturated, and it is difficult for them to maintain the same increase in the future. ."